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Aave Community Votes for BUSD Exit Plan

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On March 8, the Aave community\’s ARFC proposal on \”BUSD Off-shelf Plan\” has been voted (ARFC proposal is usually considered as \”temperature check\”), and has re…

Aave Community Votes for BUSD Exit Plan

On March 8, the Aave community’s ARFC proposal on “BUSD Off-shelf Plan” has been voted (ARFC proposal is usually considered as “temperature check”), and has received 99.99% affirmative votes. The proposal outlines the final exit plan of BUSD in the Aave V2 Ethereum market, which aims to reduce the liquidity of BUSD and encourage users to turn to other stable currencies. This plan involves modifying the BUSD risk parameters and will be implemented in a single AIP.

The vote on the ARFC proposal of the Aave community on the “BUSD Off-shelf Plan” has been opened

Analysis based on this information:


On March 8, the Aave community voted for the ARFC proposal on BUSD Off-shelf Plan, which received an overwhelming affirmative vote of 99.99%. This proposal is considered a “temperature check” and outlines the final exit plan of BUSD in the Aave V2 Ethereum market. The goal of the plan is to reduce the liquidity of BUSD and encourage users to turn to other stable currencies.

The plan involves modifying the BUSD risk parameters and will be implemented in a single AIP. This means that the Aave community will adjust the borrowing and lending rates for BUSD to make it less attractive for users to hold onto the currency. By doing so, users will be incentivized to switch to other stable currencies such as USDC or DAI.

The decision to phase out BUSD from the Aave market is likely due to concerns over the potential risks associated with the currency. BUSD is a centralized stablecoin, meaning it is backed by a central authority (in this case, Paxos) and subject to their regulations. In contrast, USDC and DAI are decentralized stablecoins that operate on blockchain technology and are not tied to any central authority. This makes them more resilient to system failures, and therefore perceived as a safer option by many in the crypto community.

Furthermore, Aave has demonstrated a commitment to promoting decentralization and reducing reliance on centralized entities, making the decision to phase out BUSD a logical step in their vision.

In summary, the Aave community has voted for an exit plan for BUSD in their Ethereum market, aiming to reduce the currency’s liquidity and incentivize users to switch to more decentralized stablecoins. This aligns with Aave’s broader commitment to promoting decentralization and reducing reliance on centralized entities.

Title: Aave’s Plan to Phase Out BUSD in Favor of Decentralized Stablecoins

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